The EU takes a firm step into the post-euro world of collective economic management this evening with the first meeting of the new so-called "Euro-11" committee. For the Minister for Finance, Mr McCreevy, the meeting will be a first chance to test the water on his scope for tax cuts in 1999. Finance ministers from the 11 countries participating in the euro will gather in Senningen Castle in Luxembourg ahead of tomorrow's finance council (Ecofin) meeting of 15 to set their agenda for forthcoming meetings and initiate a discussion on the monitoring of national budget strategies for 1999.
Although formally a sub-committee of Ecofin and not empowered to make decisions of its own, Euro-11 has been seen by many as a potentially powerful caucus which will emerge as the economic driving force of the Union. When established by the Luxembourg summit in December, a restricted mandate was agreed, however, which allows non-members of the euro club to participate in the meetings when matters of concern to all 15 member states are discussed.
Yet the logic of the euro process is such that the committee is almost inevitably likely to evolve into a forum much more like the original French aspiration of a mechanism for "economic governance".
Because Britain is not part of the euro, the meeting will be chaired by the Austrian Finance Minister, Mr Rudolf Edlinger. The British Chancellor of the exchequer and President of the Ecofin, Mr Gordon Brown, will only join the meeting for the preliminary discussion of the Euro-11 agenda and for a brief general discussion of the budget monitoring process.
Ministers are expected to do little more than review the broad trends in their economies or, as a Commission spokesman put it yesterday, "set the context of next year's budget and test the political temperature before ministers get down to framing their own budgets".
A paper from the Commissioner for Economic Affairs, Mr Yves Thibault de Silguy, is understood to reflect a generally more upbeat economic confidence in the Union resulting from growth forecasts that should make the budget-framing exercise less painful for most this year.
But concerns that the Irish economy may be showing signs of overheating are likely to mean that the message to Mr McCreevy will be: "No tax cuts, please."
That was the signal to Ireland from the Commission last month when its broad economic guidelines insisted that "a tight fiscal stance is required in Ireland to reduce the risk of overheating, namely in 1999, and such a stance should not be jeopardised by any further tax reductions".
The guidelines are not mandatory and Mr McCreevy may take some comfort from the fact that on the same day they were published, the Commission, in the form of its Social Affairs Commissioner, Mr Padraig Flynn, also commended Ireland's determination to reduce the non-wage costs of labour, specifically taxes, in its summary of member-states' employment strategies.
